DIY giant Kingfisher, owner of B&Q, posted adjusted pre-tax profits down 15.5% to £371m in the first half. The plunge was blamed on the wettest summer on record, foreign exchange movments and the cost of accelerating the roll-out of new common brands in the UK.
Kingfisher’s sales fell 3.3% to £5.48bn In the 26 weeks ended July 28, but rose 1% in constant currencies. Life-for-like sales fell 2.8%, while retail profit dropped 14.7% to £403m and fell 10% in constant currencies.
The retailer reported that wet weather in the UK and northern Europe “significantly” impacted footfall, resulting in £30m less profit. Seasonal product sales slid 7%, which drove the retailer to slash prices in order to clear stock.
There was a £25m impact as a result of “adverse foreign exchange movements” when exchanging the euro and Polish zloty, and a £10m cost of accelerating the UK common brand roll-out.
In the UK, retail profit plunged 20.2% to £145m because to the rain and like-for-like sales dropped 5.5%. Total sales dipped 1.8% to £2.3bn.
B&Q’s UK and Ireland sales fell 3% to £2bn and like-for-likes dropped 6%. Sales of outdoor seasonal products were down 11% and average footfall fell 20% during the “severely weather-affected weeks”.
To offset the impact of the rain Kingfisher group chief executive Ian Cheshire said:”We took action to clear excess seasonal stocks, drive indoor product sales and tightly manage cash, as well as accelerating our self-help initiatives.
“Whilst we were unable to offset fully the adverse weather impacts, our efforts meant we exited the first half in as good shape as possible and with net cash on the balance sheet.”
Retail profit at Screwfix was up 19.1% to £20m and total sales advanced 8.9% £273m, despite the difficult market cnoditins for small tradesmen. Sales were driven by the opening of 25 new outlets and offering a click and collect service. The Screwfix portfolio now totals 240 branches and another 30 are planned for the second half
Cheshire remained cautious and said self-help initiatives will be accelerated. “Having got off to a good start with our new ‘Creating the Leader’ programme, I am very confident that we can create a world class home improvement retailer and unlock the full potential of our international talent and scale,” he said.